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Afghanistan has oil reserves and in this makeshift refinery the crude oil is turned into diesel and petrol. The equipment is made from odds and ends including many parts made from wrecked military equipment. Like much of Afghanistan the refinery is a triumph of makeshift engineering and 'bodging'. During the bombing campaign the flares burning off the sulphur fumes were extinguished and the location of the refinery was not known by the US forces so it escaped destruction.
The black tarry substance is the remains of the crude oil after the diesel and petrol has been refined out of it. This is sold as a substitute for coal for heating